Toronto-based Sun Life Assurance Co. of Canada on Tuesday announced what it says is the largest annuity buy-in deal in Canadian history.

The insurer has entered into an annuity buy-in transaction, valued at approximately $530 million, with two unnamed Canadian pension plan sponsors, according to the firm’s announcement.

Under the deal, the pension plans pay a lump sum premium to the insurer and Sun Life will make monthly payments to the plans, which will then pay their plan members’ defined benefit pensions directly.

The deal effectively transfers the plans’ investment, longevity and inflation risk to Sun Life, while securing their ability to continue to deliver pension payouts to their plan members.

Sun Life developed the idea for the massive annuity after receiving inquiries from two unrelated inflation-linked pension plans, the announcement says. The insurer combined the annuity purchases for the two plans, which enabled Sun Life to pool the inflation risk and create a more efficient strategy; which, in turn, “generated significant cost savings” for the plans, the announcement says.

“We are thrilled to be transforming the annuity market, creating an innovative solution to help inflation-linked pension plans reduce risk,” says Brent Simmons, senior managing director, defined benefit solutions, at Sun Life Financial, in a statement. “This transaction is in response to market demand for affordable solutions for inflation-linked plans. Plan sponsors are looking for creative ways to de-risk and this is just one example of how we can help them meet their objectives and focus on their core business.”

This sort of combined annuity is appropriate for plans “with indexing formulas that are related to inflation but are different enough to be complementary.” the Sun Life announcement says.